Organizations across the globe are facing a double-edge sword when it comes to keeping the business healthy. Their first move during this economic downturn was to slash human capital, and the second move was to reduce inventory. Both moves aimed at reducing cost to satisfy a quarterly income statement - holding off the needs of the sound balance sheet. To better understand what is happening, please look at this video.
As you can see, this plan can only last for a few quarters. It was a wise move for the organizations that took on this strategy. But the journey will run far beyond a few quarters, and there are other issues (unreported inflation, oil price instability, flat wages, excess inventory, etc.) in the economy that require a lot of analysis by business leaders. In the end, it's about maintaining the essence of the brand - along with the value it has in the marketplace. Has the $5 widget shifted to the high end of the price equilibrium or the low end? This is the question that needs to be answered very quickly to generate the revenue necessary to satisfy shareholders and debtors.
Many companies are well-positioned to make this shift, but there are some in denial.